Sibanye Gold Ltd. CEO Neal Froneman said the company will withdraw its £285 million all-share takeover offer for Lonmin Plc if the latter fails to successfully restructure its business, Miningmx reported Feb. 22.

"There's a huge onus on [Lonmin] management not to get themselves in a black hole because we cannot ask our shareholders to take on more debt," Froneman said.

The executive said Lonmin should be net cash positive by the time the acquisition closes, which is expected in the second half. If Lonmin fails in its efforts, Sibanye may acquire certain Lonmin assets independently.

Sibanye is offering 0.967 of a new common share for each Lonmin share held, potentially giving Lonmin shareholders ownership of about 11.3% of Sibanye's enlarged share capital.

The companies have agreed on cost-reduction measures, including retrenchment plans for Lonmin, to cut debt and bring the company's operations back into the black. Froneman said Lonmin CEO Ben Magara has already made progress on this initiative.